International Funding, Local Non-Governmental Organizations, and Electoral Outcomes

William Marsh Rice University, Houston TX

Investigators

Abstract

The growth of non-governmental organizations (NGOs) has been explosive over the last few decades. A conservative estimate of international NGOs (groups with operations in more than one country) puts the number at 29,000. The growth of local groups is even more pronounced. The World Watch institute estimates that there are two million NGOs in the United States, 70% of which are less than 30 years old. In a short four-year period (1990-94), the percentage of European Union relief aid channeled through NGOs grew from 47% to 67%. NGOs now disburse more money than the World Bank. NGOs are involved in a quiet revolution: a revolution that holds important implications for the development of civil society and social capital. Perhaps their most important contribution lies in the alternatives that they provide in terms of goods, services, and civic engagement. Despite their growth and importance, we know very little about their impact on domestic politics. Theories of NGOs, their international connections, and their impact on politics can be categorized into three perspectives: liberal, neo-liberal, and Marxist. Liberals argue that the flow of international resources to local NGOs provides the means necessary for citizens to overcome or bypass weak and ineffective political institutions that fail to provide public goods and services. With external funding, previously excluded segments of society can increase their political influence. Neo-liberals see NGOs as efficient providers of goods and services. They argue that NGOs and their foreign benefactors are politically neutral; they merely take on responsibilities previously held by a state unable to provide the goods and services efficiently. Marxists argue that resources from abroad corrupt local NGOs. Once local NGOs come to depend more on resources from abroad than on achieving political victory, they quickly lose sight of their original goals, eventually demobilizing their membership. We propose the first quantitatively oriented empirical study of NGOs, foreign funding, and their impact on politics. Specifically, we estimate the impact of NGO access to foreign funding on voting behavior. Our proposal requests funds to collect financial data and electoral data, and to conduct archival research. We target a natural experiment provided by two massive World Bank projects in two Brazilian states: Rondonia and Mato Grosso. The two Brazilian states are remote and sparsely populated. Consequently, the two World Bank projects represent the vast majority of foreign resources, allowing us to trace accurately the distribution of external funds. There is an additional dimension to the experiment: each project disburses funds to local NGOs as well as to the two state governments. Because resources in each project are allocated to government agencies and NGOs, we can test whether the two methods of implementation affected electoral outcomes differently. In addition to collecting electoral and financial data, we conduct archival research to determine the degree to which each NGO is politicized. Every NGO that receives money is required to submit a brief history and statement of purpose. From that description we can obtain important information on how closely the NGO is tied to politics. By interacting the allocation of funds with the degree of politicization, we can distinguish among several hypotheses derived from the theoretical literature. The proposed study is designed not only to determine is an empirical connection exists among foreign donors, NGOs, and politics, but also to explain why.